A new report from Juniper Research has found that with annual mobile operator expenditures now in excess of $800 billion, several leading players face the possibility of costs exceeding revenues by the end of the decade without remedial action.

According to the report – Mobile Operator Business Models: Challenges, Opportunities & Strategies 2014-2019 – a combination of flatlining revenues allied to surging data traffic costs could ultimately threaten the viability of network operations.

In an analysis of 12 international operators, the report found that margins had fallen by an average of 6.4 percent over a three-year period, with five of those surveyed experiencing decreasing margins in every year throughout the period. Furthermore, a number of major operators now have single figure margins: with costs currently increasing at 1.5 percent-2 percent per annum, the situation is unsustainable in the longer term.

Meanwhile, the report found that without more widespread network optimisation, the situation could become critical in a number of developing markets. It argued that with surging mobile Internet adoption in the Indian Subcontinent, regional operators could see data costs outstrip data revenues by $45 billion within 3 years unless networks are optimized.

Shared data plans key

The report, however, pointed to a number of success stories, particularly in the U.S., where players such as Verizon and AT&T have bucked the trend in falling margins by introducing shared data plans. It observed that Verizon had seen wireless revenues increasing by more than 7 percent despite operating in a saturated market, while AT&T now had more than 14 million households on shared plans.

"Given the threat from OTT (Over The Top) VoIP and messaging services to core service revenue, the U.S. emphasis on focusing the value on the data element is absolutely the right way to go," Dr. Windsor Holden, the report's author, said in a statement. "This is particularly true within an increasingly 4G environment."